The Department of Housing and Urban Development’s Office of the Inspector General called for improvements in the servicing of Home Equity Conversion Mortgage loans, particularly in detecting and reporting fraud, after auditors discovered certain advance payments that were made after the borrowers were reported to have died. Although most of the suspicious payments were due to posting errors, some transactions raised red flags, the IG report said. There was no evidence that servicers had sent those potentially fraudulent cases to HUD for further action, it added. The anomalies were found during a routine OIG audit of the HECM program, which insures ...

The Department of Housing and Urban Development has developed a new Web-based tool which allows FHA, Fannie Mae and Freddie Mac to map all foreclosed properties for viewing by potential investors and homebuyers. The new mapping tool displays the location of all foreclosed homes in the agencies’ inventories, which account for nearly half of all real estate-owned or REO properties in the U.S. Communities with high foreclosure rates that are participating in HUD’s Neighborhood Stabilization Program (NSP) will find the REO portal useful in targeting federal funds to acquire, rehabilitate or demolish these REO properties, according to department officials. The map’s consolidated graphic listing enables ...

The National Association of Realtors is backing legislation Rep. Karen Bass, D-CA, is planning to introduce next month, which would provide incentives to first-time FHA homebuyers who obtain housing counseling. The measure is being drafted and will be introduced after Congress returns from its August recess, according to a Bass spokesperson. The bill would provide a reduction in the upfront mortgage insurance premium for FHA borrowers who get pre-purchase counseling. “The irresponsible and abusive lending practices that lead to our financial crisis hurt millions of American families, and continue to impact our nation’s economy,” said Ron Phipps, NAR president. “Housing counseling and consumer education can help ...

The Department of Housing and Urban Development has spelled out the conditions under which borrowers must successfully complete a trial payment plan before they can get a permanent standard loan modification under the FHA’s loss mitigation program. A HUD mortgagee letter (ML 2011-28) also specifies the time requirements for completing loan modification and partial claim documents for a servicer to receive an incentive fee. The FHA reported 13,368 loan modifications and 3,082 partial claims paid in June. A total of 119,703 FHA loan modifications were reported from October 2010 through June 2011, and 21,035 foreclosure claims were paid over the same period. Their workout ratios were ...

The Department of Housing and Urban Development’s Office of the Inspector General recommended that an approved FHA lender be ordered to indemnify HUD against any future losses on a number of loans with material underwriting deficiencies. An audit of Ameritrust Mortgage Bankers, based in Lake Success, NY, found that 11 of the 20 FHA-insured mortgages that the lender had originated failed to meet FHA underwriting guidelines and that a quality control plan did not meet agency requirements. Inadequate verification and documentation of borrowers’ income, assets, liabilities and credit histories resulted in actual losses of $183,327 on one loan and potential losses of more than $2.7 million on 10 loans, for total losses of more than $2.9 million, the audit found. In addition, Ameritrust officials allegedly charged ...

Bank of America and Wells Fargo continued to be the dominant FHA mortgage servicers in a market continuously plagued by high default rates. As of the 2011 midyear mark, the megabanks held 3.86 million in FHA-insured loans in their combined portfolios, giving them a commanding 54.9 percent share of the FHA servicing market, according to Inside FHA Lending’s latest analysis of Neighborhood Watch data. Including BofA and Wells Fargo, the top 50 FHA servicers accounted for 97.3 percent of the market or a total of 6.83 million FHA loans as of June 30. The total for FHA servicing was 7.02 million over the six-month period. The percentage of FHA loans that were 30-60 days delinquent was ... [Includes one data chart]

Mortgage servicing turned more profitable during the second quarter of 2011, according to a new analysis by Inside Mortgage Trends. The story is less clear on the production side of the business because of the mammoth loss reported by Bank of America. Net servicing profits for a group of nine major lenders rose 20.2 percent from the first quarter, reaching $2.08 billion. While that was a significant improvement over the $1.73 billion they earned on servicing in the first three months of the year, it was the second ... [contains one data chart]

Top mortgage lenders continued to face a huge backlog of pending loan buyback demands and insurance claims denials at the midway point in 2011, according to a new analysis by Inside Mortgage Trends.Five major lenders that report detailed data on repurchase exposure had a combined $19.26 billion of mortgage repurchase claims outstanding at the end of June. The good news is that figure was down 6.1 percent from the first quarter.The so-so news was that three of the companies reported increases in their repurchase claims outstanding during the second quarter. Bank of America – which had 60.1 percent of ... [contains one data chart]

With confidence in economic recovery continuing to waver across the country, there’s been a revival of speculation about what the Obama administration’s next move will be in the housing market, given the industry’s substantial role in the economy and the upcoming presidential election. This week the Washington Post reported that the president called for a team of advisers to create a housing finance reform proposal that would allow the government to maintain its large role in the market and extend a federal loan subsidy for many borrowers. However, Neal Wolin, deputy secretary of the Treasury, was quick to ...

The tough economic and market environment that continues to pound many lenders is also creating opportunities for others, with PennyMac, Carrington and Ocwen among the most noteworthy ready to take advantage of a strong position in the marketplace. PennyMac Mortgage Investment Trust, the real estate investment trust (REIT) run by Stanford Kurland, the former president of Countrywide Financial Corp., plans to triple its mortgage lending through an expansion of its ...